June 2, 2008
Brazil makes slow progress towards infrastructure improvement
Brazil's relative low production costs would have been a tremendous advantage if not for the high cost of transporting their product to port, according to a USDA report posted May 30, 2008.
Soy farmers continue to pay a high price for transportation due to rising global energy prices. The great majority of transportation is done by truck.
Most soy farmers in Mato Grosso will receive just over half the price of their soy at port because the other half is spent transporting their soy by truck on poor roads to ports 1500 miles away at Paranagua and Santos.
New, although limited infrastructure created in the last few years has provided options for transport out of the Brazilian Midwest. The Madeira/Amazon river outlet where barges move soy out on the Madeira River to the Amazon is now being used as an alternative for farmers in Western Mato Grosso, the report said.
This route is used primarily by Maggi group soy, which move through their port at Itacoatiara (State of Amazonas). Beans from Para and Northern Mato Grosso are frequently shipped further upriver via the Cargill port in Santarem, Para.
The Northeast Transportation corridor is becoming more strategic due to the growth of soy production in the region. A rail line from the western border of the state of Maranhao connects with the port of Itaqui. This rail line also connects with the Carajas terminal, just north of Redencao, a major soy-producing area in the neighboring state of Para.
In addition, the North-South Railway is expanding, currently connects Itaqui port with Araguaina, Tocantins but is planned to expand southward to Goiania, Goias by 2012. The most important development for the Northern Corridor will be the completion of Tegram grain terminal at Itaqui which will provide the necessary infrastructure for grain shipments. A strong rate of growth in the region over the past 2-3 years of both production and processing of soy indicates that this port will be a more widely used option for exporters in the future. Itaqu¡ not only has room to expand, but is the deepest natural port in Brazil.
